Acme Ai
A
अ
Question No. 125Interactive Test Mode
00:00
+2-0.66

Q125. Consider the following statements: Other things remaining unchanged, market demand for a good might increase if 1. price of its substitute increases 2. price of its complement increases 3. the good is an inferior good and the income of the consumer increases 4. its price falls Which of the above statements are correct?

Consider the following statements: Other things remaining unchanged, market demand for a good might increase if

  1. price of its substitute increases
  2. price of its complement increases
  3. the good is an inferior good and the income of the consumer increases
  4. its price falls Which of the above statements are correct?
Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2021 • Indian Economy

Correct Answer: Option (A) — 1 and 4 only

Concept & Option Breakdown

Standard Reference Verified

Statement 1 is correct: When the price of a substitute good increases, consumers substitute away from it, increasing the demand for the good in question. Statement 2 is incorrect: An increase in the price of a complementary good reduces the demand for both goods. Statement 3 is incorrect: For an inferior good, demand decreases as consumer income increases. Statement 4 is correct: By the law of demand, a fall in the price of a good leads to an increase in its quantity demanded.

Reviewed by Avinash Sir & Acme AI Research Team

Practice Full-Length & Sectional Prelims Mocks on this Interface

50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.

Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2021 (Q125)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Indian Economic Planning & Growth
Official Answer KeyOption (A) — 1 and 4 only

Related & Repeated Prelims PYQs (9)

Questions from other UPSC Prelims years testing the same or closely linked concept.

View Cluster in 3D Graph
2021 • Q25283% Match

Consider the following statements: The effect of the devaluation of a currency is that it necessarily: 1. Improves the competitiveness of domestic exports in th

Indian Economy • Indian Economic Planning & GrowthSolve
2013 • Q13182% Match

A rise in the general level of prices may be caused by: 1. An increase in the money supply 2. A decrease in the aggregate level of output 3. An increase in the

Indian Economy • Indian Economic Planning & GrowthSolve
2012 • Q27582% Match

Consider the following statements: The price of any currency in international market is decided by the 1. World Bank 2. Demand for goods/services provided by th

Indian Economy • Indian Economic Planning & GrowthSolve
2012 • Q13282% Match

Which of the following measures would result in an increase in the money supply in the economy? 1. Purchase of government securities from the public by the Cent

Indian Economy • Indian Economic Planning & GrowthSolve
1998 • Q29381% Match

Consider the following statements : The price of any currency in international market is decided by the: 1. World Bank 2. Demand for goods/services provided by

Indian Economy • Indian Economic Planning & GrowthSolve
2020 • Q3581% Match

Which of the following factors/policies were affecting the price of rice in India in the recent past? 1. Minimum Support Price 2. Government’s trading 3. Govern

Indian Economy • Agriculture & Rural EconomySolve
2022 • Q14580% Match

With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, the Reserve Bank of India (RBI) is likely to buy gover

Indian Economy • Banking & Financial SystemSolve
2021 • Q11080% Match

With reference to the Indian economy, demand-pull inflation can be caused/increased by which of the following? 1. Expansionary policies 2. Fiscal stimulus 3. I

Indian Economy • Banking & Financial SystemSolve
2022 • Q25080% Match

With reference to the Indian economy, consider the following statements: 1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of

Indian Economy • Indian Economic Planning & GrowthSolve

More PYQs from Indian Economy (Indian Economic Planning & Growth)

Master the Indian Economy syllabus cluster by practicing these related previous year questions.

View All Indian Economy PYQs
2024 • Q123Indian Economic Planning & Growth

With reference to the Indian economy, “Collateral Borrowing and Lending Obligations” are the instruments of:

Indian EconomyPractice
2024 • Q124Indian Economic Planning & Growth

Consider the following statements in respect of the digital rupee: 1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignmen

Indian EconomyPractice
2020 • Q126Indian Economic Planning & Growth

“Gold Tranche” (Reserve Tranche) refers to:

Indian EconomyPractice
2020 • Q127Indian Economic Planning & Growth

With reference to the Indian economy, consider the following statements: 1. ‘Commercial Paper’ is a short-term unsecured promissory note. 2. ‘Certific

Indian EconomyPractice
2016 • Q128Indian Economic Planning & Growth

With reference to ‘Bitcoins’, sometimes seen in the news, which of the following statements is/are correct? 1. Bitcoins are tracked by the Central Ban

Indian EconomyPractice
2016 • Q129Indian Economic Planning & Growth

What is/are the purpose/purposes of the Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’? 1. To bring the idle gold lying with

Indian EconomyPractice
2014 • Q130Indian Economic Planning & Growth

What does venture capital mean?

Indian EconomyPractice
2011 • Q133Indian Economic Planning & Growth

Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)? 1. The Government intends to use the revenue

Indian EconomyPractice

Frequently Asked Questions — UPSC Prelims 2021 Q125

What is the official answer for UPSC Prelims 2021 GS Paper I Question 125 (Indian Economy)?

The official UPSC answer key for this 2021 Indian Economy (Indian Economic Planning & Growth) question is Option (A): "1 and 4 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2021 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Indian Economic Planning & Growth". You can explore all repeated questions from Indian Economic Planning & Growth in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Indian Economic Planning & Growth UPSC Prelims question using option elimination?

To solve Indian Economic Planning & Growth questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

Beyond Previous Year Questions

Structured Prelims Practice & Mentorship

Pair previous year question analysis with full-length simulated mock tests and 1-on-1 faculty guidance.

APT 2027 • 50 Prelims Tests17% OFF

Acme Prelims Test Series (APT)

Built to eliminate 1/3rd negative marking losses and 50–50 option traps through structured simulation and NCERT-backed keys.

  • 50 High-Yield Tests: Subject Sectionals, Current Affairs, CSAT Paper II & Full-Length Simulators
  • 1/3rd Penalty & Trap Analytics: Identify whether marks are lost to over-attempting or conceptual gaps
  • Option-by-Option NCERT Keys: Detailed distractor analysis and elimination logic for every question
  • Custom PDF-to-Mock Generator: Convert your revision notes or current affairs PDFs into practice tests
Complete 50-Test Package
₹1,493₹1,799• Valid till Prelims 2027
1-on-1 Personal MentorshipCapped at 10 Seats

1-on-1 UPSC Mentorship with Avinash Sir

Weekly 1-on-1 strategy reviews, daily study accountability, and personalized MCQ attempt audits with an experienced UPSC mentor.

  • Weekly 1-on-1 Sessions: Direct mentorship with Avinash Sir (Former Plutus IAS Mentor, UPSC & UPPCS Mains Written)
  • APT 50-Test Series Included: Full Prelims GS1 & CSAT test series bundled at no additional cost
  • Mock Attempt & Elimination Audit: Question-by-question review to calibrate your risk and attempt accuracy
  • Prelims & Integrated Tracks: Available as dedicated Prelims mentorship or end-to-end Prelims + Mains guidance
Prelims & Integrated Tracks
17% OFF• Includes APT 50-Test Series